By RCCAQ

On June 23 of this year, the RCCAQ submitted its brief as part of the consultation conducted by the government on the limitation of ownership rights in brokerage firms. This brief, entitled “Assurer la protection du consommateur par l’indépendance du courtier” (“Broker independence as a means of ensuring consumer protection”), is the result of in-depth research and extensive reflection aimed at defending the best interests of brokers, and, in turn, their clients.

It all starts with the consumer

The goal of this government enquiry was to reassess the appropriateness of the 20% rule as a bulwark protecting brokerage firms from the potential influence of insurance companies. In the course of its work, the RCCAQ was prompted to broaden the scope of its study and consider consumer protection as a key component of its reflection. The RCCAQ’s position, then, highlights brokers’ independence as the cornerstone of the promise made to the consumer. It is, after all, the very same promise that defines what a broker is: to act with complete impartiality when dealing with clients.

That is why, regardless of the government’s decision regarding the 20% rule, the RCCAQ fervently believes that the introduction in brokerage firms of independence tests based on principles of the Taxation Act that already exist offers an effective solution to key issues, because it will:

• guarantee that control of brokerage firms remains in the hands of brokers;
• allow broker-owners the freedom to decide on funding mechanisms and the most effective business model for ensuring the growth of their businesses;
• assure consumers that the brokerage firms they do business with are able to serve their interests with complete impartiality.

A unifying vision for all brokerage firms

The main strength of the position adopted by the RCCAQ is that it is rooted in the very definition of the word “broker.” The idea of introducing independence tests goes beyond the simple concept of limitation of ownership rights, and is intended to provide a unifying orientation that benefits all brokerage firms and the entrepreneurship that define them.

Many RCCAQ members have already provided us with their comments, and regardless of how they view the 20% rule, regardless of their business models or financing structures, they agree on the soundness of the work carried out thus far and the merits of the proposed tests for the future of brokerage. One of them in particular, John Morin from Morin Eliott Associés, thinks that “the RCCAQ has done very serious work in this area.” Irrespective of his position on the 20% rule, he believes the “solutions proposed by the RCCAQ are appropriate for ensuring that brokerage firms retain control over their own affairs and are clearly to the advantage of brokers and consumers.”

There is still work to be done

While it has been a focal point of the discussion over the past few weeks, the limitation of ownership rights is not the only ongoing issue at the RCCAQ: there is also our unflagging work on the review of Bill 188, as we continue to make representations to push for the tabling of the Bank Act and the harmonization of taxes, in particular.

The summer will be an occasion for us to continue to examine these issues in depth and develop strategies for representing members’ interests to decision-making authorities when the time comes.

Liaison+ will take a break during the summer period, and return in September with new features.

Have a nice summer!